June 2021 Market Update

Here is the update on the crazy Northern Virginia real estate market…round and round and round it goes, where it stops, no one knows. The interesting thing is the market has shifted, and it happened quickly. Was it mortgage interest rates rising so high it stopped people from buying? No. Was it a flood of foreclosures and short sales hitting the market? No. Was it a pricing bubble that popped and collapsed home prices? No. Was it regular sales coming on the market giving buyers more choices? No.

So, what has caused the shift in the market?  First, the frenzied market we experienced from mid-January through early May could not be sustained. We were experiencing 50-70 showings in only one or two days and contract numbers in the high teens to low twenties on houses we put on the market.  Additionally, we saw prices escalate tens of thousands to hundreds of thousands above list price, with buyers waiving everything to “get” a home. It was a stressful time for everyone involved – buyers, sellers, and Realtors alike.

Now, we are seeing 5-15 showings in an entire weekend, and we are receiving between one and five offers. Still excellent numbers historically, but it is, in a different way, causing stress on sellers. The expectations of sellers are what they “heard,” “saw,” or “read” about the market two months ago or more – not recent facts. Well, the market shifts on a dime with no real rhyme or reason. The one thing I feel has put a damper on the market is “buyer fatigue.” Buyers had gone out, written contracts, and lost out on many houses. They wrote what they perceived to be the perfect contract and were beat out by someone who had to have the home and irrationally made an offer the seller couldn’t refuse. The conversations I am having now with buyers and agents are – oh, they have three offers? Someone will pay too much; I don’t want to waste my time. Therefore, we are now seeing fewer offers; still, great offers – above list price and waiving contingencies, but the number of contracts and showings are just down. So, if you are a seller or considering selling, your house will sell; just realize the market is different today, not bad, simply different. On the other hand, if you are a buyer, don’t give up; fewer people competing for homes mean you have a better shot at getting one now than a few short months ago. We can help you determine your best course of action, whether buying or selling, so call us to learn more!

Have a great summer!

April 2021 Market Update

The Northern Virginia real estate market continues to amaze me. Inventory levels remain extremely low, demand remains extraordinarily high, and this is still occurring even though rates have increased slightly over the last few weeks. I do not believe this will change or slow down any time in the near future. The level of demand is just too high.

We continue to see multiple contract situations as the new normal throughout much of Northern Virginia. It is common to see all contingencies being removed and prices set way above the original list price in these situations. In early March, I wrote a contract on a house in North Arlington that was listed for $935,000. It was a 4-bedroom, 3-bath home, and just 1,280 square feet. The offer was cash, close in two weeks with no contingencies, and my buyer offered $1,026,000. According to the listing agent, we were not even close! One of the 23 received offers went up to $1,081,000. Insane! This leaves 22 other active buyers still looking to own in that price point in Arlington – so again, I don’t see this market slowing any time soon. All the being said, the condo market is the only anomaly as most condos are sitting on the market.

So, what is going to happen is what I am often asked. My belief is that inventory will remain low for the foreseeable future as people have purchased or refinanced at exceptionally low rates. As rates increase, there will be little, if any, motivation to move. If someone has a $500,000 mortgage with an interest rate of 2.75%, what will motivate them to move to a home with a $750,000 mortgage at 4% or even higher? I think this is what will stagnate inventory levels over the next few years. People will only move if there is a genuine need to do so – like marriage, kids, schools, job, divorce, death, etc.

Speaking about interest rates, they have inched above 3% for the first time in several months, but please keep this in mind, they are still below where they were this same time last year and are still below historical lows mortgages. Earlier I mentioned rates at 4% or higher; I don’t believe we will be there for some time, so no need to worry about this happening. I foresee we will be in the low to mid 3’s for the remainder of the year.

As always, I am more than happy to speak with you about your situation in more detail as each situation is unique and personal.

Happy Spring!

March 2021 Market Update

It’s hard to believe that one year has passed since our world changed with the Pandemic. There have been so many changes in our daily routines, the way we interact with each other, how we conduct business, and so much more. The hardest part for many of us was that we lost loved ones or could not visit them due to restrictions. Let’s hope this all changes soon with the vaccine. 

As far as the real estate world goes, it has remained resilient and has even thrived. To some, it may be hard to believe, but true. Historically low-interest rates, crazy low inventory levels, and high demand resulted in a frenzied market over the last year. Housing gained over $3.1 Trillion in equity in 2020 as prices escalated in almost every market around the country. We are only a little over two months into 2021, and we continue to see a strong housing market. Inventory remains extremely low, rates have ticked up slightly but are still very attractive, and buyer demand remains very robust. The biggest concern remains the low inventory. We continue to see multiple offer situations in all price ranges throughout Northern Virginia. Many times, contracts are being submitted without the buyers even seeing the home! Crazy but true. Buyers are conducting pre-offer home inspections, waiving all contingencies, and are bidding 10-13% over the list price to get into a home. I believe we will be in this type of market for the next few years. Unfortunately for buyers, I don’t see a flood of houses coming on the market to cover the demand that is out there today.  Interest rates will remain low to help keep the market moving. We continue to have low unemployment relative to other parts of the country, so people are continuing to relocate to our area. Couple all of this with the Millennials entering the market as home buyers; it’s quite the tsunami.

If you are considering selling or buying a home, it is more critical today than ever to have a professional representing you. Expert negotiation skills and market knowledge are essential in this aggressive market. Please feel free to call me to review your situation in more detail or allow us to help someone you know. I am always happy to help.

I am looking forward to warmer weather and more hours of daylight, and I hope you are too.  Happy Spring!

February 2021 Market Update

Again, I have said it before, and I will repeat it, inventory levels on homes for sale in Northern Virginia are critically low! We currently have just 1,701 homes for sale in all of the counties we serve in Northern Virginia. The amazing fact is the number of condos that are currently for sale – 792 – which represents just under 50% of the total inventory. Condos typically do not reflect nearly 50% of the inventory levels … more on this later. 

Continuing with the numbers; there are only 646 single family homes currently on the market. Are you kidding me? There are only 235 townhouses total, again, WOW! Do you know what this means? The chances of multiple contract situations are possible on virtually every home on the market. We have had as many as 30 contracts submitted on one house in Gainesville priced at $635,000. It escalated above $700,000. We had another home in Aldie that had 78 showings and 62 visitors at the open house. This one was priced at $772,000 that had 21 offers and escalated to $831,700. It is insane – I cannot think of another word to describe it. 

A question I am frequently asked is when will it end? I think it will be a long time, as I believe it will be rate driven, and rates will remain low for the foreseeable future. Once rates rise to the 4 or 5% range, we will see a slowdown in contracts/purchasers, but not an inventory increase. Another question is, when will buyer burnout take them out of the market? My answer: it depends as this is and has always been an individual question. I have heard about prospective buyers writing as many as 15 contracts (on different homes) and still in the fight, while others are not even entering the market because of these “bidding” war situations. Typically, buyers will write until they win a bid on a property.  Usually, in a market like this, it has been between 3-5 times in my experience. 

One more question I hear is how do I buy if I must sell my house first? This one is more complicated, but I can give you details if you are interested. We have nine ways to make this work!

If you or someone you know would like to discuss their situation with me in more detail, whether it is purchasing or selling a home, please feel free to call me.

Have a Happy Valentine’s Day!!

January 2021 Market Update

Happy New Year!  Welcome to 2021!  I predict this will be yet another exciting year with lots of new challenges, adversity, change, and so much more. The good thing to note is out of these situations come positive outcomes for many if you keep the right mental attitude, stay adaptable, and take care of yourself and those around you. We do not know what lies ahead but keeping strong is as vital as ever.

I have been asked, “what is going to happen with real estate in 2021”?  It depends on whether you are a buyer, seller, renter, landlord, or investor. Inventory levels in Northern Virginia continue to decline. We ended the year with only 1,737 houses for sale in Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties and all the cities located within this area. As you can imagine, this number is extremely low, historically speaking. This makes purchasing a home extraordinarily difficult for buyers. I am currently working with a buyer where we have bid $30,000 over list, $40,000 over list, and $50,000 over list and on three separate houses, and we have lost out on each of them. They are in the $400,000 – $500,000 price point. The listing agents said they were overwhelmed with offers and calls – one had 17 offers in hand in less than 24 hours. So, you can see the buying environment is uber-competitive. On the flip side, this makes it a great time to sell a home if you are looking to move. Depending on the price point, location and condition, sellers can expect multiple showings as well as multiple contracts with purchasers paying more than the sales price and waiving many, if not all, the contingencies associated with a sale. Renting houses is also a challenge as there is a .4-month supply of homes available, and of those, 40% are single-family or townhouses. Again, this makes being a landlord easier to get results as there is a brisk rental market in Northern Virginia. Most investors like houses that cash flow, and with prices being bid up, many investors are choosing to wait on the sidelines to see if more inventory comes on the market prior to getting into bidding wars. Time will tell if we get more inventory or not, but I believe we will experience low inventory throughout 2021. Call me to discuss your situation in more detail so we can help you make the right decisions.

So, the market that is struggling the most right now in our area is condos. In Arlington County, 84% of the resale inventory is condominiums. The average days on the market for a condo in Arlington is 76 days and the average overall days on the market for all properties in NOVA is 16. Quite a difference, right? The rental market is remarkably similar in all of NOVA – condos are on the market for 126 days, and single-family and townhouses are on the market for 42 days. Be careful when considering an investment in condos right now.

As always, I am happy to speak with you about your situation as each one is different.  Happy New Year, and as always, be safe, make wise decisions when you go in public, so you

December 2020 Market Update

As we close out 2020…

A lot has transpired since the last newsletter… a presidential election, Covid-19 outbreaks resulting in additional shutdowns, local jurisdictions reverting back to more restrictions on public gatherings, regional school districts canceling or staggering the return to the classroom, and of course, Thanksgiving. Luckily, we had great weather on Thanksgiving and could eat outside with our “at-risk” family members and maintain social distancing with them throughout the day.

Interest rates remain low on the real estate front; fewer people are re-engaging in forbearance on their mortgages, and houses are still selling – often with multiple offers. All in all, it’s a great market not only in Northern Virginia but around the country. 

As we enter the holiday season, inventory levels remain low, making it difficult for buyers looking to take advantage of great rates. We are only 9% below last year’s level of homes for sale during this same week in time. As I look back, this was the beginning of the inventory shortage in our area. It will be interesting to see if we match our low from this past January when we had just over 1,800 houses for sale. If you are considering relocating, downsizing, or upsizing, call me to see how we can help you get into a home. We have strategies for every market to help people become homeowners.

So, the question I am often asked this time of year is, should we sell our house or wait until the spring. My answer is – it depends. Do you need to sell, or do you want to sell? If you sell, where will you go? If you have to sell and have the next home secured or have living arrangements lined up, sell today. If you are looking to sell to take advantage of the market, we need to talk sooner rather than later. As I previously mentioned, rates are great, purchasers are out in the market looking to buy, we know what other houses are for sale right now versus the springtime, and we know what price we can get for it based upon recent sales. Also, in all likelihood, if the house is in great shape, is in an ideal location, and is priced right, it will sell quickly with little inconvenience to the seller. If you find yourself in this situation, please call me to discuss your situation in more detail.

Until next year, be safe, make wise decisions when going out in public so you remain healthy so you can celebrate the holidays with your loved ones.

October 2020 Market Update

Real estate continues to be the shining light in the current economic recovery. Buyer demand, housing prices, and new and existing home sales continue to be strong – not only in Northern Virginia but also across the country. Our issue continues to be low inventory levels for the demand that we are presently experiencing. As of today, we have 30% less inventory of homes for sale versus this same time last year. The median days a house stayed on the market in August was just six days, so as you can see, demand is there.

Additionally, prices are up year to date 7.95% over last year’s pricing. The pandemic pushed the housing market back about three months, so what would typically be a slower time of the year is one of our strongest. If you are considering selling, now is an ideal time as we couple all this data with the fact that we have the lowest interest rates in the history of tracking. Contact me to discuss your situation in more detail if you are considering selling.

So, where is the market headed into the future? There is talk of another foreclosure crisis that could lead us into a Great Recession… will this happen? There is a housing bubble, and prices are going to crash… will this happen? My answer is no to both. First, we have low inventory levels and high demand. In October 2006, we had just under 23,000 houses for sale; today, we have 3,014. If properties are foreclosed on by banks and released to the market, they would sell quickly and not put us into a housing crisis. Again, back then, we had a 10-month supply of houses, today we have a .8-month supply of houses – a considerable difference. Back then, people “walked away” from their homes because of price drops and lending practices; this is not going to happen now. Today’s loan products, loan qualifications, and lending guidelines are nowhere like what they were prior to the Great Recession.

Back then, we had exotic loan programs, 100% financing programs, teaser rate loan products, and just bad underwriting guidelines. Homeowners today are more financially stable, which will result in fewer foreclosures. If there is an area that may be in jeopardy, it would be in the Mom and Pop landlord arena.  Basically, people who have one or two investment properties may not be able to “carry” the houses if their tenants are unemployed. This is a small segment, so I don’t see it significantly impacting our market.

Additionally, prices are rising, but not at the rate they were in 2004 – 22% year over year increases, 2005 – 24% price increase year over year and in 2006 it was 23%. As I mentioned, we are at a reasonable pace of 7.95% today; therefore, I do not foresee a crash in prices like we saw in the past. We will see a decline in housing price increases, but not a decline in prices… big difference. Our market is stable and will continue to be so for some time, in my opinion. If you would like to discuss this further, please feel free to call me. 

Enjoy the weather! Have a safe and Happy Halloween!

September 2020 Market Update

Here Comes Fall (and all things pumpkin spice)

The Global Pandemic has not slowed down the real estate market here in Northern Virginia. Low inventory levels continue to be the main issue as there are many buyers in the market and not enough homes to purchase. Couple this with historically low-interest rates, and we have a solid seller’s market, which also means we have an extremely challenging buyer’s market. Today, the median days on the market are just six days, and the average days on market are only 19. Now, of course, there are some properties in specific locations and price points that are staying on the market longer, but generally speaking, most houses are selling quickly. Buyers need to make decisions swiftly and make solid offers if they want to be in the running as the next owner of their home of choice.

In today’s market, we do have some additional challenges, not just the shortage of homes for sale. A remarkably close second challenge we are experiencing involves the lending process if the buyer does not select the right lender. For example, we are encountering long lead times for appraisals, lack of urgency to close loans on time (they treat the purchase transactions like a refinance and the loan is in the order it was received,) numerous appraisals coming in low as buyers are escalating prices above market price and response time frames from the loan officer as they are overwhelmed with refinances. As a side note, it is extremely important to select the right lender when you are accepting a contract on your listing or when you are buying your home. The highest offer is not always the best offer.

Additionally, we have a lot of stress in the market. Buyers are losing out on multiple homes, which causes frustration. Sellers not receiving offers as high as they believe they should make them anxious. Agents can be rude, arrogant, unresponsive, and unprofessional, which causes everyone to stress out.  It is so important today to hire the right agent to guide you through the home selling or home buying process, an agent that knows how to navigate with you for a smooth and seamless process. So, if you are looking to sell or buy a house today, call me – I have helped many others successfully buy and sell properties in today’s unbalanced market.

I hope you have a great Labor Day!

August 2020 Market Update

As we enter the dog days of summer and the Month of Miracles…

And prepare for a new version of back-to-school, I hope you and your family are safe, remaining healthy, and are making wise decisions when going out in public.

This month’s update may seem like a broken record, but it is what it is these days. Inventory levels of resales homes in Northern Virginia remain extremely low – 41% below last year’s levels.  Currently, there are only 2,714 houses for sale throughout our area, which includes Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties, as well as all the cities in between. Even with low inventory levels, sales remain strong as they are up 18% week-over-week from last year and up 17% over the previous 30 days from last year. This result is a .7 month’s supply of houses – last year it was a 1.5-month supply. We are still receiving multiple offers on our listings, and the median days on market are a mere seven days making it an exceptionally strong seller’s market. I believe we are going to be in this market for some time as the discussions I am having with homeowners and agents is that they are not likely to sell or they don’t have a lot of houses coming on the market. This has resulted in the increased prices we are seeing. Year to date, prices are up 6.25% over the same time frame from last year. As I’ve said before, it is an excellent time to be a seller. If you are considering selling, call me to discuss your situation in
more detail.

Buyers do have challenges in today’s low inventory, multiple contract situation market we are in, but we are getting our clients into homes! Our team has exclusive strategy sessions where we share ideas on how we are negotiating to get our clients the home of their dreams. These sessions and strategies have been working, which is great for our clients. In addition to this, interest rates are now below 3%! The expectation is they are going to stay in this range for some time, so there is good news for those looking to become owners or potentially moving up to their “forever” homes. If you are considering looking into the option of purchasing a home, call me to set up a private consultation. I am here to help!

Please remember, even if now is not the right time for you to buy or sell, it may be the perfect time for you to refinance! I can put you in touch with one of our lender partners, so feel free to reach out.

Stay cool in this heatwave we are experiencing. Good luck to all of the students out there! Curious what the Month of Miracles is? Give me a call, I’d love to tell you all about it!

July 2020 Market Update

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As We Begin to Reopen…

As we transition into Phase III with some areas beginning to open up while others remain on restricted status, I encourage you to stay safe, make wise decisions when you go out in public, so you and your family continue to remain healthy.

The result of the pandemic has limited the number of houses coming on to the market here in Northern Virginia. Potential sellers are still concerned about people coming into their homes, which is understandable during this time. The crazy thing is – the pandemic and various Phases we have been in have not slowed down home sales! The inventory level of houses for sale is down 43% from this same week last year, yet sales are up 16.5%. It is critical that we find people looking to sell their home and are comfortable doing so because we are continuing to see multiple contracts on houses throughout Northern Virginia (in most price points). It is not uncommon to receive 15-25 contracts on a house in less than 48 hours when it is priced right, in the right condition and location. Most recently, I heard about a condominium in Falls Church that received 44 contracts – one of our fellow agents lost out on that one just last week.

The onslaught of offers has prices escalating, and as a result, we are experiencing some appraisal issues. I make sure to set the proper expectations for both sellers and buyers if I feel the house will not appraise.  In addition to this, I meet the appraiser at the property to keep them informed on the situation – the number of contracts, prices, the quantity of showings, etc. to try to avoid low appraisals. However, they still are happening in some cases, as some prices just cannot be supported by the appraisers. We have had several people waive the appraisal contingency to secure a home, which has been great for my sellers. We have also had many appraisal waivers from lenders when the borrower has excellent credit, is putting down 20% or more, and the neighborhood can support the pricing. To learn more about this, please call me.

Buyers – get in the game!  We can help, and rates are still amazing. Today’s rates are below 3% on 30-year fixed loans. Additionally, if you aren’t planning to move and you haven’t refinanced, now is a great time. Call me to learn more about this and our strategies to win in multiple contract situations or for a connection to one of my preferred lending partners. I am always here to help!

I hope you had a great 4th of July!!

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